Cargill eyes startup mentality through new incubator

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Dive Brief:

Cargill is part of a group looking for 10 promising startups to take part in a 13-week workshop beginning in mid-July in Minneapolis, according to a company news release. Also involved in the Techstars Farm to Fork Accelerator are Techstars, a worldwide entrepreneurial network, and Ecolab, a global leader in water, hygiene and energy technologies and services.

The application process, which begins on January 8, will focus on startups that can advance key aspects of the food system — including food security and safety, ag tech, consumer goods and supply chain management.

Startups accepted by the program will receive mentor support from Cargill and Ecolab executives and access to their market expertise, global connections and investment capital. The Techstars network of entrepreneurs, mentors, investors and other partners also will work with selected startups throughout the three-year cycle of the program, Cargill said.

Dive Insight:

Accelerators and incubators are popular as a way for larger, more established food companies to invest in a creative idea that could yield a healthy return in a relatively short period of time. Nestle USA invested in an accelerator this summer to support emerging food and agricultural startups, and Land O'Lakes started an incubator in July to help dairy product startups reach scale and better compete with plant-based alternatives.

Yogurt maker Chobani chose seven food startups from around the country to participate in its second incubator class this past fall. The winners took part in workshops and mentoring events with Chobani employees, plus they each received $25,000. Acre Venture Partners, a fund backed exclusively by Campbell Soup, has invested $13 million in Pilotworks, a culinary incubator that provides kitchen facilities, industry mentorship, marketing and other services to food entrepreneurs.

And in November, Conagra and Kellogg joined with the city of Chicago, non-profits and other investors to create an incubator cleverly titled “The Hatchery.” Based inside a 67,000-square-foot facility on the city’s west side, it plans to host 75 different food companies — 80% of them in the red-hot snacking category.

For its part, Cargill is looking to invest time and resources in technology shaping the future of agriculture and to address "some of the greatest challenges facing the food system," according to Justin Kershaw, the company's chief information officer. "At the same time, we see the partnership with Techstars as a way to inject startup energy inside Cargill."

What do companies gain from investing in these incubators? For one, they acquire insight into emerging brands and their operations. It’s no secret that consumers are turning away from mainstream packaged goods and embracing niche products. These smaller producers are often at the cutting edge of flavor trends and other innovations, and CPGs want to know what makes them tick. Companies also want first dibs to acquire any products that catch on.

If such startups are successful, they may go on to manufacture quality food products for a relatively small investment, or they could come up with a brilliant solution for a vexing food system problem. In addition to the other, more tangible benefits, the association also can bring positive public relations to the larger and more established companies that take the time and energy — and sometimes the financial investment — to nurture the young firms along. Cargill and the companies that went before it are unlikely to be the last to venture into this realm as they look for the next big thing to help their business.